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America West posts higher quarterly profit
Thu Jul 21, 2005 09:43 AM ET [Combined Articles]
By Kyle Peterson
By August Cole, MarketWatch
Last Update: 4:39 PM ET July 21, 2005
CHICAGO, July 21 (Reuters) - America West Holdings Corp. (AWA.N: Quote, Profile, Research) , parent of America West Airlines, on Thursday said its quarterly profit rose nearly 30 percent even as soaring fuel costs offset its strong revenue.
SAN FRANCISCO (MarketWatch) -- Despite spending more on fuel than on labor, America West Holdings on Thursday reported stronger-than-expected second-quarter earnings on a 20% increase in operating revenue.
The No. 8 U.S. carrier said second-quarter profit rose to $13.9 million, or 29 cents per share, from a year-ago profit of $10.7 million, or 20 cents per diluted share. Excluding special items, the airline's second-quarter net income was $20.9 million or 41 cents per diluted share, compared with $3.5 million or 7 cents per share in the second quarter of 2004. Analysts polled by Thomson First Call, on average, expected America West to report a 13-cent profit. Individual estimates ranged from of a loss of 15 cents to earnings of 35 cents a share.
"I think it's a relatively strong report and better than we've seen on the revenue side," said Bill Warlick analyst at Fitch Ratings. "It was a very good revenue performance, the best we've seen in a number of years." He said the carrier's earnings would have been especially strong had it not been for record high fuel prices.
America West said its unit revenue increased 11.9 percent in the second quarter. Its total operating revenue rose 20 percent to $833.20 million. "While we are pleased with our revenue performance these improvements are not enough to offset the ongoing high price of fuel," said Derek Kerr, America West's chief financial officer, in a statement. "Fuel expense for the quarter was the company's greatest expense item." Chief Financial Officer Derek Kerr noted that fuel costs look to continue to be larger than salaries and benefits expenses.
Excluding a $2.7 million loss related to fuel hedging and a $4.3 million loss related to the sale and leaseback of planes, America West said it would have earned $20.9 million, or 41 cents a share, vs. $3.5 million, or 7 cents a share, last year.
Revenue came to $833.2 million, up from $694.2 million.
Fuel costs rose 44% to $191 million while labor costs rose 7.3% to $173.8 million. The carrier paid a $1.67 a gallon on average during the second quarter - a 43% higher price than last year.
Cost per available seat mile rose 12% but excluding fuel it would have fallen 2.7%
Kerr said the airline sees no sign that fuel costs will fall significantly any time soon. The airline industry in general has been battered by soaring fuel prices, weak revenue and competition from low-cost rivals.
The Phoenix-based airline said it ended the second quarter with $413.9 million in cash, of which $322.3 million was unrestricted.
The carrier announced in May plans to buy bankrupt US Airways Group (UAIRQ.OB: Quote, Profile, Research) in a deal that would create the sixth-largest carrier in the United States.
"Our proposed merger with US Airways is well on track with $565 million of committed equity, Department of Justice approval and teams from both companies working diligently on integration," America West Chief Executive Doug Parker said in a statement. "We continue to anticipate closing this important transaction in the fall," Parker said. Shares of America West up 10 cents or 1.22 percent at $8.29 in early trade on the New York Stock Exchange.
Thu Jul 21, 2005 09:43 AM ET [Combined Articles]
By Kyle Peterson
By August Cole, MarketWatch
Last Update: 4:39 PM ET July 21, 2005
CHICAGO, July 21 (Reuters) - America West Holdings Corp. (AWA.N: Quote, Profile, Research) , parent of America West Airlines, on Thursday said its quarterly profit rose nearly 30 percent even as soaring fuel costs offset its strong revenue.
SAN FRANCISCO (MarketWatch) -- Despite spending more on fuel than on labor, America West Holdings on Thursday reported stronger-than-expected second-quarter earnings on a 20% increase in operating revenue.
The No. 8 U.S. carrier said second-quarter profit rose to $13.9 million, or 29 cents per share, from a year-ago profit of $10.7 million, or 20 cents per diluted share. Excluding special items, the airline's second-quarter net income was $20.9 million or 41 cents per diluted share, compared with $3.5 million or 7 cents per share in the second quarter of 2004. Analysts polled by Thomson First Call, on average, expected America West to report a 13-cent profit. Individual estimates ranged from of a loss of 15 cents to earnings of 35 cents a share.
"I think it's a relatively strong report and better than we've seen on the revenue side," said Bill Warlick analyst at Fitch Ratings. "It was a very good revenue performance, the best we've seen in a number of years." He said the carrier's earnings would have been especially strong had it not been for record high fuel prices.
America West said its unit revenue increased 11.9 percent in the second quarter. Its total operating revenue rose 20 percent to $833.20 million. "While we are pleased with our revenue performance these improvements are not enough to offset the ongoing high price of fuel," said Derek Kerr, America West's chief financial officer, in a statement. "Fuel expense for the quarter was the company's greatest expense item." Chief Financial Officer Derek Kerr noted that fuel costs look to continue to be larger than salaries and benefits expenses.
Excluding a $2.7 million loss related to fuel hedging and a $4.3 million loss related to the sale and leaseback of planes, America West said it would have earned $20.9 million, or 41 cents a share, vs. $3.5 million, or 7 cents a share, last year.
Revenue came to $833.2 million, up from $694.2 million.
Fuel costs rose 44% to $191 million while labor costs rose 7.3% to $173.8 million. The carrier paid a $1.67 a gallon on average during the second quarter - a 43% higher price than last year.
Cost per available seat mile rose 12% but excluding fuel it would have fallen 2.7%
Kerr said the airline sees no sign that fuel costs will fall significantly any time soon. The airline industry in general has been battered by soaring fuel prices, weak revenue and competition from low-cost rivals.
The Phoenix-based airline said it ended the second quarter with $413.9 million in cash, of which $322.3 million was unrestricted.
The carrier announced in May plans to buy bankrupt US Airways Group (UAIRQ.OB: Quote, Profile, Research) in a deal that would create the sixth-largest carrier in the United States.
"Our proposed merger with US Airways is well on track with $565 million of committed equity, Department of Justice approval and teams from both companies working diligently on integration," America West Chief Executive Doug Parker said in a statement. "We continue to anticipate closing this important transaction in the fall," Parker said. Shares of America West up 10 cents or 1.22 percent at $8.29 in early trade on the New York Stock Exchange.